It is increasingly common for law suits to be settled out of court. This also holds true with workers’ compensation cases. The workers’ compensation system is uniquely suited for settlement before a case ever sees a court room, and employers should keep in mind the benefits and potential risks of settlement. Permanent disability presents unique issues in terms of settlement.
There are two main ways to settle a permanent disability claim. The first is called “compromise and release.” This method means that the employee agrees to take a one-time lump sum payment in exchange for agreeing that the case is forever settled. After the compromise and release settlement is accepted by the workers’ compensation judge, the employee is then directly responsible for any and all future medical expenses. No additional claims can be made for reimbursement through the workers’ compensation system for the injury. An employee will often choose this option if he or she also has health insurance that would assist with medical costs. The other type of settlement is called “stipulation with request for award.” In this type of settlement, the employer and employee come to an agreement about the type of injury, the extent of the injury, and the medical care that is required for treatment. The employee then receives periodic payments based on the degree of injury that the parties have already agreed to. In addition to the periodic payments, the employee may still seek to have his or her medical expenses reimbursed through the workers’ compensation system in the future. It is less common for employees to choose this type of settlement, however it is often required if the employee still works at the employer with the same insurance company
Employers should also be aware of some of the wrong reasons to settle a claim, or the wrong time to settle a claim. Especially for permanent disability, it is not appropriate to finalize a settlement when it is not completely certain that the employee’s disability has become permanent and stable. The employer should carefully scrutinize medical records to make sure that an employee’s injury is now indeed stable. An employer should also avoid the temptation to settle a claim just to get it out of the way. A claim is stressful for any employer, but it is important to make sure that a claim is valid before agreeing to pay permanent disability benefits.
If your business is facing a workers’ compensation claim, you need an experienced attorney to help you examine your settlement and trial options. Contact us today at (714) 516-8188 for a consultation to discuss your business and your options.